This argues to the side of the point. There’s plenty of models where founders are rewarded for taking risks and the community ends up owning significant shares. In fact Jack himself seems to have been screwed out of much of his stake, which isn’t uncommon when going through many rounds + IPO, and he’s a big proponent of one of these alternative models.
One answer is something people here love to hate, and yet it’s proven to work well for this exact scenario.
It also solves in my mind a few other problems with social network startups. You see before it was almost entirely luck and timing, there didn’t exist many so if you had something unique and the collective unconscious was ready for something new you’d get lucky launching twttr at SXSW.
To beat Twitter or do something similar but different you’re back to the classic catch-22 of social networks, the users drives the value, but you need users. Startups like to give away a few hundred bucks to early adopters, but that just isn’t an incentive anymore.
What is an incentive, and has been proven without a doubt as one as of late, is giving away micro equity. Users will flock to your platform if they get a chance in the upside.
So it solves the catch-22, and it solves the long term ownership alignment problem.
It also attracts scammers, but that shouldn’t have ruined the whole deal for everyone. Unfortunately it did thanks mostly to the SEC.
One answer is something people here love to hate, and yet it’s proven to work well for this exact scenario.
It also solves in my mind a few other problems with social network startups. You see before it was almost entirely luck and timing, there didn’t exist many so if you had something unique and the collective unconscious was ready for something new you’d get lucky launching twttr at SXSW.
To beat Twitter or do something similar but different you’re back to the classic catch-22 of social networks, the users drives the value, but you need users. Startups like to give away a few hundred bucks to early adopters, but that just isn’t an incentive anymore.
What is an incentive, and has been proven without a doubt as one as of late, is giving away micro equity. Users will flock to your platform if they get a chance in the upside.
So it solves the catch-22, and it solves the long term ownership alignment problem.
It also attracts scammers, but that shouldn’t have ruined the whole deal for everyone. Unfortunately it did thanks mostly to the SEC.